Cuts supply by 1.6bn barrels
By Emmanuel Addeh
The Organisation of Petroleum Exporting Countries (OPEC) yesterday restated its commitment to full conformity with crude oil production curtailment plan agreed to by members in April, following a devastating fall in prices.
At the 24th meeting of the Joint Ministerial Monitoring Committee (JMMC), which took place via video conference, the cartel said that it was able to slash global production by 1.6 billion barrels between May and October this year.
The meeting was held under the chairmanship of Saudi Arabia’s Minister of Energy, Prince Abdul Aziz Bin Salman and Co-chair , Deputy Prime Minister of the Russian Federation, Alexander Novak.
After reviewing the monthly report prepared by its Joint Technical Committee (JTC) and developments in the global oil market since its last meeting on 19 October 2020, the committee emphasised the ongoing positive contributions of the Declaration of Cooperation (DoC) in supporting a rebalancing of the global oil market.
The committee said it reviewed the crude oil production data for October 2020 and welcomed the positive performance in the overall conformity level for participating OPEC and non-OPEC Countries, at 101 per cent.
“Between May and October, participating OPEC and non-OPEC countries have contributed to reducing the global supply by approximately 1.6 billion barrels, including voluntary adjustments, and this has been key to the rebalancing of the market.
“Moreover, countries compensated a total of 768 tb/d to make up for previously overproduced volumes. This led to achieving a level of 99.5 per cent of the production adjustment commitments since May,” OPEC stated.
It expressed its appreciation to the participating countries, particularly to the UAE and Angola, which it said had performed beyond expectation, while reiterating the critical importance of adhering to full conformity and compensating the overproduced volumes, in order to achieve the objective of market rebalancing and to avoid undue delay in the process.
The committee noted the robust demand in Asia and the positive news of possible vaccines against the Covid-19 virus, but said that these developments had been overshadowed by the resurgence of Covid-19 cases in major economies.
It said noted more stringent Covid-19 containment measures across continents, including full lockdowns, are impacting the oil demand rebound and that the underlying risks and uncertainties remain high.
“All participating countries need to be vigilant, proactive and be prepared to act, when necessary, to the requirements of the market,” it said.
OPEC stated that the committee’s recommendations will be provided to the 12th OPEC and non-OPEC ministerial meeting, which is scheduled to take place by video conference on 1 December 2020, while the next meetings of the JTC and the JMMC are scheduled for 16 December and 17 December 2020, respectively.